Carbon Neutral Vanuatu

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					                       Carbon Neutral Vanuatu
 by Dr Sean Weaver, Chief Technical Advisor, Vanuatu Carbon Credits Project
             Feature article, Vanuatu Daily Post, 26 April 2008.

Imagine a time when businesses from industrialised countries provide subsidies
to help Vanuatu gain energy independence at a time of rapidly rising oil prices.
Imagine those same businesses paying landowners in Vanuatu to protect their
rainforests and grow new agroforestry and timber plantations. It sounds like a
dream, but this is exactly how carbon credits could work for Vanuatu – and in the
process help Vanuatu become the world’s first carbon neutral nation.

What is Carbon Neutrality?

Carbon neutrality is the end point of a process that goes approximately as
    1. measure your annual carbon dioxide emissions (carbon outputs)
    2. measure the annual carbon dioxide absorbed by new forests (carbon
    3. calculate your annual carbon balance (outputs minus inputs)
    4. establish a programme to drive this balance down to zero by reducing
       your carbon outputs and increasing carbon inputs
    5. when you reach a zero balance you are carbon neutral

According to the World Bank Vanuatu emits approximately 80,000 tonnes of
carbon dioxide each year – which is very low on world standards. For this
reason, Vanuatu is one of the few countries in the world capable of going carbon
neutral in the next few years. Indeed some countries have announced their
intention of going carbon neutral (New Zealand and Costa Rica are examples)
but Vanuatu, by virtue of its small size and large land area is well positioned to
win this race.

Carbon Neutrality and World Oil Prices

A carbon neutrality programme could include a strategic shift away from imported
fossil fuel to renewable energy for rural and urban electricity and vehicle fuel,
thus reducing carbon emissions. Why would this be a good for the economy?

Oil was trading at over US$118 a barrel on Wednesday this week at the New
York Mercantile Exchange, and is set to reach the US$120 mark before too long.
World oil prices are headed in one direction – up. This is because we have
probably peaked in global oil production, which means that global supply is going
into terminal decline which will probably last for the next half century. Demand
continues to rise though, and this will keep pushing prices up and up and up.

Vanuatu relies on imported petroleum-based diesel for land transport and grid-
connected electricity generation. These are core components of the Vanuatu

energy sector, and energy is the backbone resource for this and all economies.
When global energy prices rise, all economies suffer. This is because energy
demand is so inelastic that rising energy prices simply starve the rest of the
economy of money.

The result of increasing global oil prices for a country like Vanuatu include:
increasing food prices, increasing cost of all imports, decrease in the value of
exports, increasing fertiliser costs, increasing electricity prices, decreasing
disposable income, rising unemployment, and increased international
competition for tourism market share (as the tourism market contracts).

Vanuatu Oil Fields

One way to gain independence from fossil fuel whilst reducing carbon emissions
is to swap petroleum-based diesel with coconut oil and coconut oil-based bio-
diesel. This would also provide a much needed boost to the copra industry. To
add icing to the cake - you can get carbon credits for doing so, and sell those
credits in the international carbon market for hard cash.

UNELCO already uses about 15% coconut oil in electricity generation, but a
carbon neutrality programme that included a bio-diesel production facility could
see this rise to 100%. Bio-diesel production in Vanuatu would also enable bio-
diesel to be available for the land transport fleet, fuelled by an indigenous oil field
in the form of coconut plantations. There is already sufficient supply in the
Vanuatu coconut oil sector to meet demand for domestic grid-connected
electricity and land transport. So what are we waiting for?

The timing has never been better for a bold strategic shift in national economic
planning. The opportunity arises from carbon markets designed to help achieve
carbon neutrality and sustainable economic development.

Carbon Markets?

“Carbon will be the world's biggest commodity market, and it could become the
world's biggest market over all” – New York Times.

One of the tools for shifting the global economy into a low carbon or carbon
neutral form is carbon markets. This is where companies and governments in
industrialised countries buy carbon credits as part of their emissions
responsibilities under the Kyoto Protocol.

Who sells carbon credits? Vanuatu could set up shop, generate and then sell
carbon credits to help finance its transition to energy independence with a
national commitment to 100% renewable energy by 2012. Carbon credits can
then be seen as an international subsidy for smart strategic development.

Furthermore, trees are made of wood, wood is made of carbon, and this carbon
comes from the carbon dioxide in the air. So, forests contain lots of carbon taken
out of the air – several hundred tonnes per hectare depending on the forest. For
this reason growing new forests can also earn carbon credits in addition to the
income you can get from timber and other forest products. The money you get for
your credits is able to be factored into the business model for forestry
development in Vanuatu, including plantation timbers such as whitewood, and
agroforestry projects using species like nangai.

Stopping deforestation and preventing the degradation of natural forests helps to
avoid carbon emissions. In fact about 20% of global human-caused carbon
emissions are from deforestation, most of which is happening in developing
countries. Forest conservation therefore, is another activity potentially eligible for
generating carbon credits and something worth pursuing as a national

The Vanuatu Carbon Credits Project

The Vanuatu Carbon Credits Project (VCCP) is being run by the National
Advisory Committee on Climate Change. It is designed to help build Vanuatu’s
technical and institutional capacity to gain access to carbon finance for
sustainable development and a future goal of carbon neutrality.

Accessing carbon finance can be a complicated process in the forest sector, and
requires sophisticated carbon monitoring capabilities that are still in the process
of being established in Vanuatu through the VCCP. The VCCP is also helping to
build capacity for carbon credits and carbon neutrality in the energy sector where
it is potentially a lot simpler.

How Close Is Vanuatu to Carbon Neutrality?

We know that Vanuatu is producing about 80,000 tonnes of carbon dioxide
equivalent annually. What we don’t know is how much carbon dioxide is being
taken out of the atmosphere each year from Vanuatu’s forests.

If Vanuatu had a national forest carbon monitoring system in place we may
discover that carbon neutrality is closer than we first thought. Vanuatu gained UK
Government funding in 2007 for a National Forest Area Change Assessment
which was completed for 1990-2000, but more work is needed. A national forest
carbon monitoring system is top of the “to do list” for the Vanuatu Carbon Credits
Project and funding for such a system is currently being sought from the World
Bank and other sources.

How Else Would Carbon Neutrality Benefit Vanuatu?

To be the first carbon neutral nation would be a major boost for the national
brand, which would benefit all exports and especially the tourism sector. Carbon
neutrality would also substantially boost Vanuatu’s international standing as
leader among developing nations in sustainable development. This would greatly
strengthen its negotiating position at the United Nations Framework Convention
on Climate Change. Here, developing countries play an important role in forcing
the heavy polluting nations to take on deeper emissions reductions targets in
future climate change policy.

If we are to avoid dangerous climate change as a global community we need to
peak in global carbon emissions by 2015, and then drive emissions to levels way
lower than 1990 levels thereafter. This is why a carbon neutral nation in the
Pacific can play an important international role, leading the way to a low carbon
sustainable future.